RI oil output set to decline: BP Migas

RI oil output set to decline: BP Migas

The Jakarta Post, Jakarta

The country's oil output will fall to one million barrels of
oil per day (bpd) in 2005 from the current 1.2 million bpd unless
new reserves are found, a top official has announced.

The deputy head of the Upstream Oil and Gas Implementing Body
(BP Migas), Zainal Achmad, said that the government had to
improve the investment climate in the oil sector to attract fresh
investments in developing new oil fields.

"A drop in the oil output will undoubtedly have an impact on
the state budget," Zainal told Antara over the weekend.

Revenue from the oil and gas sector has been a major
contributor to the country's state budget. Last year, for
example, 29 percent of the government's income, which totaled Rp
300 trillion (US$33.17 billion), came from this sector.

There are worrying signs that investors are putting a brake on
fresh investments in the oil and gas sector.

Last year, out of the 14 new oil and gas blocks offered to
investors, only one block was taken.

This year the government is offering another 11 oil and gas
blocks, located in East Java, Central Java, Bali and Kalimantan.

Many analysts have said that a number of problems have
discouraged investors from investing in the oil and gas sector.
These include a worsening security condition in some parts of the
country, poor implementation of the regional autonomy law and log
bureaucratic delays in dealing with government offices.